The move to increase tax by Kenya Revenue Authority (KRA) will see Kenyans dig deeper into their pockets to pay higher retail prices for used imported vehicles. According to Car Importers Association of Kenya (CIAK), retail prices of cars are expected to rise to 43%.
KRA has been asked by CIAK to suspend the Current Retail Selling Price (CRSP) chart which was presented recently. CIAK complained that the new taxes came as a shock to them. This is because the charges were not posted on the KRA website. Additionally, CIAK claims that they together with other industry players had not been consulted in the matter. This has made it difficult to sell the existing vehicle merchandises which are still accumulating charges of storage.
Peter Otieno, CIAK Chairman sited an example of a 2360 cc 8-seater Toyota Alphard which was sold at Sh3, 088,590 is now going for Sh5,441,850. The car has attracted Sh203, 958 (69%) in additional import duty. Similarly, a 3500 cc Lexus RX450 has drawn Sh485, 670 (63.2%) other import duties prompting a price rise from Sh6, 982,000 in 2017 to the current price at Sh11, 525,368. Toyota Land Cruiser has attracted Sh403, 195 additional responsibilities, rising in price from Sh17.9 million to Sh21, 671,820.
Mr. Otieno acknowledged that CIAK was at loggerheads with the new CRSP index citing that the 2017 imported hundreds of vehicles currently lack competitiveness. He said that there were no profits to be earned from the already imported cars that have been affected by the new taxes. CIAK wants the late fees suspended to allow discussions and consultations on the issue to be carried out.
CIAK called for a meeting with Julius Musyoka, the commissioner of Customs and Border Control through a letter dated 10th February 2018. Mr. Otieno confirmed that the meeting was to allow CIAK to raise their concerns in the new tax index. The chairman hoped that Mr. Musyoka would make the best determination on the issue.
